The Company You Keep
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The Mutual Advantage

A mutual insurance company, simply put, is a company that is not publicly traded and therefore has no shareholders. Instead, policyholders are the ones who share in ownership of the company. With a mutual insurance company, customers who purchase certain "participating" products — such as whole life insurance — are entitled to vote in the board of directors elections and share in any annual dividends that are declared. These policyholders have the right to expect that the company's highest priority is to safeguard their interests.

Why Insurance Companies Demutualize
Many large insurance companies have recently demutualized, reorganizing themselves into publicly traded stock companies. A frequent motivation for demutualization is the need to raise money to fund growth — growth that is often accomplished through mergers and acquisitions.

New York Life, however, has no need to issue stock to raise capital. With strong cash flow and $182 billion in consolidated assets1 as of December 31, 2006, we have more than sufficient assets to fund our continued growth. For example, our 2000 purchase of Mexican life insurance company Seguros Monterrey was funded entirely from our annual cash flow.

Policyholders vs. Shareholders
The life insurance business is unique. People pay premiums — for 10, 20, 30 years or more — and in return, they receive a promise. A promise that the company from which they are purchasing insurance will be there, strong and solvent, decades from now to pay a claim, help fund a retirement, or help pay the bills for a nursing home. As a result, New York Life's management team has one overriding objective: to ensure that the right decisions are made today, so that New York Life can continue to meet its obligations to policyholders tomorrow and far into the future.

On the other hand, when an insurance company demutualizes, its management must weigh the interests of policyholders against the expectations of shareholders. This can create some very difficult conflicts of interest. Shareholders generally tend to judge a company's performance based on projected earnings for the quarter or the year — not as much on how the business will be doing 20 or 30 years into the future.

Managing for the Long Term
The question really comes down to this: What's in the best interests of our policyholders and the company — remaining a mutual or becoming a stock company?

The answer for us is absolutely clear: Being a mutual allows us to maintain our focus on serving our policyholders by delivering high performing whole life insurance policies through the best-trained financial professionals in the industry. Over the years we've made innovations in our products and investments in our people to ensure that we'll continue to meet the long-term needs and requirements of our policyholders. We believe this approach is in the best interests of both our clients and our company — today and for the years ahead.

New York Life is Number One
New York Life is the largest mutual life insurance company in the United States.2 We are also one of the largest corporations in American business, a member of the Fortune 100. As such, although we are organized as a mutual, we maintain quarterly financials. We rigorously control expenses. And we publish financial reports for our policyholders and other stakeholders.

In other words, we combine the results-driven culture of a publicly owned company with the policyholder focus of a mutual company.

How Our Policyholders Benefit
Because we are a mutual company, we serve just one constituency: our policyholders. Because we are a mutual company, we can offer participating whole life insurance, which is eligible for dividends, to our policyholders. Because we are a mutual company, financial strength and stability remain our prime objectives, as they have been for more than 159 years.

The Company You Keep®
These are some of the reasons why New York Life is remaining a mutual company, even as other insurance companies demutualize. We will simply continue to do what we've always done: be here when our policyholders need us.

Since 1845, New York Life has helped generations of families achieve their financial goals, by providing quality insurance and financial products. The values of strength, integrity and humanity that built this company are behind every product we offer and every service we provide.

We are proud to be America's number one mutual — and The Company You Keep®.

1 As of December 31, 2006. Presented in conformity with accounting principles generally accepted in the United States of America (GAAP).
2 2007 Fortune 500 Industry Rankings, Insurance: Life, Health (mutual).

New York Life Insurance Company
New York Life Insurance and Annuity Corporation (A Delaware Corporation)
51 Madison Avenue
New York, NY 10010

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